Inventory management systems are required to automate and efficiently keep track of your inventory levels. If your inventory levels are not properly tracked, it will result in rising costs. Accurate inventory counting is one of the most important aspects of inventory management.
An inaccurate inventory can be the difference between profit and loss, because not only can the current year’s performance be misstated, an inaccurate inventory in one year will cause inaccuracy in subsequent years. Your stock requirement for the present and the future will be miscalculated, and this will result in over or under stocking of items. Such serious overlook in stocks could cause severe setbacks to organizational functioning in the future.
Inventory management systems are software by which you can better mange you inventory activities. It will ensure that your inventory data is accurate, up-to-date and the required inventory is always available. In order for the inventory management system to carry out its activities efficiently, it must be fed with the correct data to begin with.
There are many activities to follow so that you can ensure that your inventory management system has been fed with the correct data. The first building block of the inventory management system is the electronic catalogue, which is an online catalogue from which goods or services can be selected or ordered. Ensure that items are correctly placed into this catalogue from which your inventory management systems will retrieve data for vital calculations.
Using the electronic catalogue data, directly link the movement of products throughout the supply chain using RFID (Radio Frequency Identification) for products. In the case of organizations dealing with transportation vehicles and trailers/containers the use of Vehicle Location/Wireless Communications technologies is recommended.
Once the catalogue and tracking infrastructure is in place and working throughout the supply chain, the essential process of CPFR (Collaborative Planning Forecasting and Replenishment) must be carried out between the organization implementing the inventory management system and it’s trading partners so that they can together move to the next level in inventory management.
Using the correct technology to input information into the inventory management system will ensure that you have a system that performs efficiently in maintaining stock levels.
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